Reporting mechanisms and delegation of decision rights : the case of the Lebanese banking sector

Abstract

This research investigates the relationship between delegation of decisions, responsibility rationalization, incentive based schemes, and misreporting within the Lebanese banking sector. One hundred and one branch managers, head of departments and regional managers in the Lebanese commercial banks were asked to complete an online questionnaire. Findings suggest that responsibility rationalization has a positive effect on misreporting and that delegation has an effect on incentive based schemes. Results also demonstrate that delegation, responsibility rationalization, misreporting, and incentives vary with respect to respondents demographics. However, the findings provide hard evidence on the impact of both delegation and incentives on misreporting and that the relationship between misreporting and delegation is mediated by incentive-based strategies. It also suggests that the indirect relationship between delegation and misreporting is not moderated by responsibility rationalization. Research limitations, implications and suggestions for future research are also discussed.